Skip to main content
index page

Dealing With Unlicensed Payday Lenders

Submitted by Shazzers on Tue, 02/03/2009 - 11:21
Posts: 17344
Credits:
[Donate]

Updated on July 14, 2010: At the bottom of this post is a newer version of a letter template which you may or may not want to use, make sure you use your own words, this is only a sample.

If everyone will just give a link to this thread to the new members who come here for guidance it may be more helpful and less work for the experienced members who are researching information. I wrote this awhile back and am most happy to share it. THANKS!

You are only obligated to pay back the principal amount you borrowed from an unlicensed/illegal Internet Payday Lender.

What should you do?

Close your account asap, if you are unable to close your account, go into your bank and ask to speak with the Branch Manager, tell him/her you need a hard debit block placed on your account immediately! Explain that you are revoking ACH authorizations from unlicensed/illegal companies, and have learned these companies are notorious for ignoring revocation, therefore it is important to BLOCK any withdrawal attempts on your account to protect your interest. This is your privilege, do not accept no for an answer. The following link will provide you important information regarding closing accounts. CLICK HERE
What next?
AFTER your account is secure send each pdl (the unlicensed and illegal) an email similar to THIS (please scroll down to locate letter template). Tailor this letter to your needs, and try to write it with the same basic concept in your own words. You will need to research and locate email addresses/physical addresses if you don't already have them, I suggest that you type the name of the pdl (example: "oneclickcash address") in the search box in the upper right hand corner of this forum. You may also search for addresses HERE at the Better Business Bureau.
File complaints: Most of the time, you can file a complaint online with the following, I encourage you to follow through with doing so, you will need to search the Internet for your state Attorney General's website, however, here are links to file complaints for the FTC, Online complaints: Federal Trade Commission., and the BETTER BUSINESS BUREAU.
Keep in mind that you may not receive a response for days, or even weeks, or, you may receive harassing and threatening phone calls. I have found the best way to deal with this is not to respond or reply, simply hang up.
Side note: If you have paid an illegal/unlicensed payday lender above and beyond the principal amount you borrowed, it might be a good idea to demand a refund and a paid in full letter/receipt. You may or may not get one or both. It still doesn't hurt to include that tidbit in your letter. :)
[QUOTE]
Date:

Name Of PDL

Your Name
City, State
Account #

This letter is to inform you that I am aware of the FACT that the loan you issued to me, is NOT legal or binding in my state. For your convenience, I have included my state payday loan laws below.

(Insert Your State payday loan laws here)

(Insert either (a) OR (b) which ever statements below which applies to you)

(a) The state of (insert your state) prohibits payday loans, therefore, I am bound by the state laws where I reside. As I have no presence in your state or country (only insert one choice, state or country, depending on your situation.), therefore I have no legal obligation to the 'governing laws' you may have detailed.
OR
(b) The state of (insert your state) requires Internet payday lenders to be licensed in MY state. I have already researched this information, your company does NOT have a license to lend in the state of ___________, if I am mistaken I will need proof in the form of a license number so that I may verify it with my Attorney General. I am bound by the state laws where I reside. As I have no presence in your state or country (only insert one choice, state or country, depending on your situation.), therefore I have no legal obligation to the 'governing laws' you may have detailed.


Be advised that as of today (insert todays date) I am revoking ANY and ALL ACH authorizations with your company from debiting any AND all of my personal accounts, per Federal law, Regulation E Section 205.10 Preauthorized transfers. I also revoke ANY and ALL wage assignments I may have signed, by you, including but not limited to; any of your affiliates, dba's, and collection agencies assigned to this account. None of the above no longer have my permission to access my accounts or impose a wage assignment.


I will only communicate to resolve this matter via email. If you ignore this notice and attempt to contact me or any of my references via telephone, you will be ignored and any payments owed will be delayed. I am willing to pay the principle amount of the loan only, however, no address means NO payments, this is not negotiable.

If you do NOT reply to this notice within 48 hours I will be forced to file complaints with my Attorney General (insert name of your attorney general), the BBB and the Federal Trade Commission. If you reply to this notice with any misleading legal implications or menacing course of actions you are unable to follow through with, I will be forced to take actions against you which could cause you to lose your license in the state of (insert the state they are licensed in) < (only use this statement if the illegal lender is licensed to lend in a state other than yours) and cause damage to your reputation, which could potentially decrease your clientele!



Sincerely,

Your Name[/QUOTE]


I live in hawthorne Ca and i got a pdl and i got a call from Dominic Laruso and he said i did check fraud for a pdl in the amount of $680.00 and it was with Vince Enterprise and the bank was wachovia back in April 16, 2009 the guy Dominic Laruso says their company name is Vander Jack i don't recall getting a loan with vince enterprise and i dont have wachovia bank but they keep calling me, i remember another company called first legacy management calling me for the same thing i was stupid enough to give them my account number but i had my money returned because it was fraud. I tried calling the number that they gave me and it was disconnected so for this other company what should i do


Submitted by on Tue, 12/14/2010 - 10:03

( Posts: 202330 | Credits: )


Quote:

I spoke with the DFI in Michigan about ThinkCash - FBD of Delaware and she told me they were not licensed in the State of Michigan. I also wrote to the First Bank of Delaware about working out a payment and they said I needed to contact ThinkCash. I thought that was interesting.


Think Cash and FBD are the same thing. FBD is a bank and is legal. They are not a payday loan company, therefore licensing doesn't apply to them in the same way.


Submitted by OhioGal1 on Tue, 12/14/2010 - 15:26

OhioGal1

( Posts: 5253 | Credits: )


To me it sounds like common sense, DO NOT take out all of these loans if you know you cannot repay. Trying to make these lenders sound like the bad people may seem like a good idea, but it boils down to personal responsibility.....:rolleyes:


Submitted by on Sun, 01/02/2011 - 15:45

( Posts: 202330 | Credits: )


Quote:

To me it sounds like common sense, DO NOT take out all of these loans if you know you cannot repay. Trying to make these lenders sound like the bad people may seem like a good idea, but it boils down to personal responsibility.....:rolleyes:

We aren't here to pass judgment on people, and you aren't welcome here if that is your purpose. We are here to help people find a solution, if you have something to add that is constructive and helpful, great, if not, leave.


Submitted by Shazzers on Sun, 01/02/2011 - 17:54

Shazzers

( Posts: 17344 | Credits: )


They are ALL illegal -

1) VA does NOT allow the use of the internet or "electronic" means to do payday lending. VA has LICENSED payday loan shops (a lot unfortunately) BUT EVERYTHING has to be done in person and by check/cash. NO EFT's, no internet, no ACH!!!

2) VA allows ONE loan at a time only and only from licensed shops

3) $30 per $100 borrowed

4) AND when it comes time to pay back the loan they HAVE to offer you a choice of paying in full (of course) AND paying the amount owed WITH NO FURTHER INTEREST in four installments!!

Watch out though - some internet lenders may try or have gotten a VA license BUT if they use ACH by definition they've broken VA law.

If you've paid the principal back AND if you've paid back $30 times $100 that you borrowed ONCE (in other words, say you had a $300 loan and you paid back $390) you've satisfied VA law (of course this contract is UTTERLY unenforceable in VA - and they know it). If you've done this, you're good to go.

Write to them a CERTIFIED letter cc to your state's AG, to their state's AG, FTC, etc., that (and there is a good sample letter elsewhere on this thread) that you have become aware that their operation in VA is illegal, because of (what we discussed above) OH! Also put on your cc list - Consumer Federation of America (they really HATE these guys!)

BUT and HOWEVER - you've paid back the principal and all interested allowed by VA

THEREFORE< no money is owed, and no further money will be paid. Any further contact and/or collection activity will be referred to the proper authorities.

NOW!!! FIRST AND FOREMOST - CLOSE THE BANK ACCT FROM WHICH THEY'RE DEBITING YOU - DO A HARD CLOSE - ONCE YOUR ACCT IS CLOSED, THAT'S IT.

OPEN A NEW ACCOUNT ELSEWHERE!!!!!!!!!!!

NOW - THEY WILL!!! CALL YOU AND THREATEN YOU - DON'T LET THEM GET TO YOU - THEY WILL GO AWAY. THEY CANNOT DO ANYTHING TO YOU - REPEAT ANYTHING!!!!! OTHER THAN TRY TO SUE YOU IN SMALL CLAIMS COURT IN YOUR!!! STATE WHERE YOU!!! LIVE. DO NOT BELIEVE ANY OF THE CRAP SOME OF THEM WILL TELL YOU. (VA'S LAW SPECIFICALLY STATES THAT ANY "BAD CHECKS" FROM PAYDAY LOANS ARE NOT!!!!!! SUBJECT TO REGULAR BAD CHECK LAWS WHICH ARE POTENTIALLY CRIMINAL - THIS IS A LOAN - NOT!!! A PURCHASE (SAY YOU GO TO WALMART, BUT A TV, THEN PURPOSEFULLY BOUNCE THE CHECK)

Sorry about the caps, but you have to HOLD FIRM ok?! In fact, if possible, change your phone number that they have. ALSO, tell your job that your bank account has been broken into, and your info has been stolen..just in case some of them call there. That will nicely dovetail with you opening a new bank acct. Go for small local banks and/or small local credit unions.


Submitted by on Fri, 01/21/2011 - 07:58

( Posts: 202330 | Credits: )


So I live in NY and i have a loan with loan point usa. I have paid way over the principal amount of my loan. If I follow your advice of sending this form with the correct information as per my situation and have my bank block their ACH request can there be any actions taken against me or be held legally bound? Also, I have 2 other loans that have not been paid to the full prinicipal as of yet. Can I let the loan get to the prinicipal amount and follow the same procedure as I am trying to take with loanpointusa?

Thanks for your help,
Dman


Submitted by on Sat, 01/22/2011 - 16:23

( Posts: 202330 | Credits: )


I understand that fact , but if I go on Monday send them the form you have posted on this thread and then go to my bank and close my account , what can happen to me ? I also have 2 other loans that are not paid in full yet. Point blank what I am asking is can I get in more financial/legal trouble then I am already in


Submitted by tapeape1031 on Sat, 01/22/2011 - 17:09

tapeape1031

( Posts: | Credits: )


I responded to you other thread, but I'll copy+paste it here in case you don't check the thread...All PDLs are illegal in the state of NY (unless it is backed by a bank like ThinkCash). So you do need to close or set to deposit only your checking account first. Then proceed to let them know you revoke ACH and that you know they are illegal. As far as ramifications, different lenders act differently. Some harass but can't follow through on their threats of for example serving you since they are illegal. But other lenders back down and send a PIF letters. A few are even known to send refunds if someone has overpaid, but that is the exception and not the rule. No legal ramifications will come no matter what the illegal lender says though. Your wage won't be garnished (make sure you revoke wage assignment from the illegal PDL which is voluntary and let your employer know), you won't be sued, you won't be arrested, charges won't be filed against you, etc... As far as your other loans, you can work out arrangements with them after. But do NOT give them your new checking account or access to a check from the new account or something. You can pay them up to the principal amount by mail through money orders or, worst case, those prepaid cards you can find at Walmart. And if they refuse to give you an address and only want ACH/electronic, guess what? They don't get their money until they work with you on your terms. So in summary, you will not get into more trouble than you are in. In fact, this will help get some pressure off your shoulders. Just make sure that if your PDLs are backed by a bank like the First Bank of Delaware through a site like ThinkCash, you do need to work with them/pay them off.


Submitted by Remember Remember on Sat, 01/22/2011 - 21:21

Remember Remember

( Posts: 18 | Credits: )


OK, I am really excited! I emailed the Board of Financial Institutions, Consumer Finance Division for South Carolina, and below is what I was told:
Dear Ms. name removed for your safety,
How can I determine if an internet payday lender is licensed to legally offer online payday loans in South Carolina?
Thank you for your help,
Angie Smith
[LEFT]We have not licensed any online payday lenders.
Gayle Fletcher
Board of Financial Institutions
Consumer Finance Division
(803) 734-2020
Thank you for your quick response. So if I understand correctly, any payday lender offering an online loan to a SC resident would be operating illegally within the state of SC since they are not licensed by the state?
[SIZE=2]Thanks,[/SIZE]
[SIZE=2]Angie Smith[/SIZE][/LEFT]
[SIZE=2][FONT=Arial][COLOR=black][LEFT][FONT=Arial][SIZE=2][COLOR=#0000ff]Yes. If you have a complaint, please file with SC Department of Consumer Affairs @ [URL="http://www.scconsumer.gov/"]www.scconsumer.gov[/URL][/COLOR][/SIZE][/FONT]
[LEFT]So that being her response, should I proceed to send out an email, such as the sample I found in this thread, letting them know that since I have found out that they are operating illegally in SC, I will only pay the principal? Also, should I send this same email to the the PDLs that I have reached an agreement with (who have charged me well above and beyond the principal)?
I am feeling a little ray of hope.....[/COLOR][/FONT][/SIZE][/LEFT]
[/LEFT]
[SIZE=2]
[/SIZE]


Submitted by angsmith911 on Mon, 01/24/2011 - 11:20

angsmith911

( Posts: 69 | Credits: )


Cool! Right from the horses mouth!

I would not pay them any more than you owe them, less any payments you have already made. I would offer to make payments (on your terms), but only give them the option of receiving payments via the mail with money orders, don't give them any other options, they are non deserving. Also, they will probably tell you they don't have an address, well, too bad, no address means no payments, the end.

An email is sufficient for online lenders, no sense in wasting your time and money trying to send a letter through the mail, it will either be tossed in the garbage or refused.

You can use the template as a guide, but I suggest you try to use your own words, they will claim you have used a template floating around the Internet, probably either way. lol

PLEASE, most importantly, CLOSE YOUR ACCOUNT BEFORE you send out any letters, you simply can't leave that account open anymore, now that they have your account info, so does every other Internet criminal. Open a new one and save yourself a lot of heartache.


Submitted by Shazzers on Mon, 01/24/2011 - 11:34

Shazzers

( Posts: 17344 | Credits: )


I closed my account back in September!!! That's why they have all been hounding me so badly - because now I am more than 120 days delinquent! I have had 2 or 3 turn me over to collections, and one to a law office. I have been threatened in every way imagineable - that my wages would be garnished, I would be arrested, sued, etc....

Before I found this forum, I did reach some settlements with a few of these companies, and unfortunately, have already paid them off, including their outrageous interest and fees! I currently have payment arrangments with a few more, and they were given a credit card to process the agreed upon payments, so I seriously doubt that I will be able to stop them from taking the January and February payments, but hopefully for the remainder, I can force them to accept the principal only, which I do want to repay as I did borrow their money.


Submitted by angsmith911 on Mon, 01/24/2011 - 11:46

angsmith911

( Posts: 69 | Credits: )


I sent the email letter. I only received a response from two of the online payday people. One said I needed to contact the collection agency, the other tried to say they are legal in the state they are in which makes them legal in my state. I just deleted the email. Now I am getting calls from a couple collection agencies. None of them have given me the letter saying they are paid in full. Powell Law Firm called my job today I told them I wasn't able to take calls at work then he kept on so I hung up. He called right back talked to my supervisor to verify employment. Is this just a scare tactic or can they garnish my wages?


Submitted by on Wed, 01/26/2011 - 15:47

( Posts: 202330 | Credits: )


Sub: #572
jessica47 Replied on Yesterday, 06:10 PM
How did you get them to refund money? They still are telling me that I have to follow the state laws that THEY reside in....

I'm so confused as to what is law, what is not.


Jessica.
I too received the same emails from them. Saying first I was with a collection agency. My response to that email was that I am aware I am with an agency however want proof of their license in my state and theirs. (I am in NV which they need to be licensed in tom lend to). They reponded with they are licensed in DELAWARE which is where the loan took place and that it's legal. I then responded to that email with a copy of this threads sample letter. I inputed all the appropriate info like my Attorney Generals name but in addition I added something like this

" I am fully aware that this loan is illegal and that I have paid back what I owe in fees/interest and owe no further payments since this company is not licensed in my state. I am requesting a letter confirming this loan Paid in Full and paid as agreed. In addition I am requesting a refund of the funds that I overpaid you in fees."

I included my breakdown of fees and the dates when the funds were taken out.
Their response was what I asked for. letter saying paid in full and as agreed and they are sending a refund. (keeping fingers crossed)

Hope that helps. You really need tonstay up on it and keep sending the emails. They will eventually respond.


Submitted by swirls on Thu, 01/27/2011 - 11:32

swirls

( Posts: 8 | Credits: )


Thank you for including the sample letter. Yesterday at work I received over 30 calls in a row from a man calling from a company called "Central Investigations". He told me I was going to be fired from my job , and demanded to speak to my manager immediately. I kept hanging up on him, but he would call right back. My co-workers sitting next to me took many of the calls, telling him to stop, and that this a place of business. He was screaming at THEM TOO!!!! I am very embarassed about this whole thing. I filed an online complaint with the MA Attorney General right after the incident. I want to send this sample letter to these people, but I do not have an address.....


Submitted by on Sat, 02/05/2011 - 07:27

( Posts: 202330 | Credits: )


My pdl is VIP LOAN SHOP
Are they legal in CA. I made a loan advance with them in December for $500. They debited my account for $225 for a finance charge in January 7. Payments so far
1/21/11- $150
2/4/11- $150

When I called 1/11/11 to check on my balance, a guy name Irvin said it is $500 principal and $150 finance charge. He said the payments of $150 have been goin' towards my finance charge. Is this legal? Please help me.


Submitted by on Fri, 02/11/2011 - 11:20

( Posts: 202330 | Credits: )


no in fact if what you posted is true then you owe nothing as VIP loan shop is not legal period and anything debited goes toward the loan as being they are not legal they are not entitled to anything but the principle.basically you paid 525.00 on a 500.00 loan.there is a sticky titled DEALING WITH ILLEGAL LENDERS at the top of this forum.follow it to the letter.


Submitted by paulmergel on Fri, 02/11/2011 - 11:25

paulmergel

( Posts: 15514 | Credits: )


Do we know anything about utah? I have 3 online pdl's that I am trying to research if they are legal or not. SDS processing is one of them. I borrowed 325 and have paid them 1800+ in renewal fees. I want to be able to determine they are not legal so i can request a refund as well.


Submitted by on Thu, 02/24/2011 - 15:22

( Posts: 202330 | Credits: )


I have three pdl ameriloan 390 pay 90 every two weeks....qloot 260 i've been paying them 60 dollars every two weeks for almost a year now and greatsky cash 390 i pay them 90 every two weeks ,I live in nj and these are all internet pdls. closing my bank acct is not option as i have other bills that come out of my acct. i need help quick as this is putting a drain on my life.


Submitted by on Sun, 03/06/2011 - 11:53

( Posts: 202330 | Credits: )


I borrowed $350 from LoanPointUSA in August of 2010 and paid back $1,200 until I went to the bank and put a block on them. I tried several times prior to find out who this was as when I borrowed from them and printed out the paperwork it printed out blank due to their settings and I did not notice this until later.

Just by a fluke I opened up my spam email and found a letter from Powel and Associates law firm for collection of this account. live in Michigan and did not find them licensed in this state. I sent a letter requesting proof of this loan and requested no further contact by phone.

Can you tell me if they are licensed in the state of Michigan and should I wait until they send me the proof of loan, then fill out your form letter in response?


Submitted by on Sun, 03/20/2011 - 20:16

( Posts: 202330 | Credits: )


well since POWELL AND ASSOC are an illegal pdl collecting bottomfeeder.i suggest if the email contained any threats like arrest,or if they tried to pass the email of as a legal document.file an AG conplaint and attach that email as part of it.neither LOANPOINT,or POWELL is licensed at all and should be treated as such.btw i doubt powell included an address to send a DV letter.i would respond to that email only after filing the AG complaint.let them know you are not going to be swayed by illegal threats via email,and have forwarded there email to your AG as part of a complaint against both them,and loanpoint.then if they call hang up as again a bottomfeeding piece of garbage.


Submitted by paulmergel on Mon, 03/21/2011 - 06:10

paulmergel

( Posts: 15514 | Credits: )


Wow! I spent hours on this forum yesterday and learned so much about my payday loan spiral. I was in debt to 7 Internet loan companies and it was costing me $2000 a month in fees and interest. I used the form letter on the forum and sent them to all of my Internet loan companies. I just received an email from Magnum Cash (where I still owed $1500 after paying over $1000 in fees and interest) and they wrote the following:

[FONT=Verdana][COLOR=#000000]ICA is familiar with the template letter available on the internet and information provided on sites like debtconsolidationcare.com. Regardless, the lender has no desire expending effort servicing a customer who does not appreciate the value of their installment loan and revolving line of credit products that are designed to meet a cash flow crisis on a moment's notice. The Director of Operations for ICA has agreed to consider your loan from 3/14/2011 as paid in full. Your account has been closed.

I'm in SHOCK! I have yet to hear from my other loan companies, but this forum has saved my financial life! I urge ALL of you to send letters. Even if my other loans go to collections, I will have reduced my debt by $1500. These are predatory lenders and must be stopped! Thanks to ALL of you!!!
[/COLOR][/FONT]


Submitted by on Tue, 03/22/2011 - 15:20

( Posts: 202330 | Credits: )


I just wanted to throw it out there that I just got a PIF email from Loan Point USA!!! It was stated that my loan is now considered paid in full and they are pulling it from "Farrell Law Group". I am demanding a PIF letter to be mailed to my physical address as well. I did demand a refund but at this point I don't know if it is worth pursuing.

I have been lurking this site for the past month and the help I have recieved has been invaluable. I have settled my Check n Go, First Cash Finance, Cash Net USA and now Loan Point USA.

I have only one payday loan that is not resolved and that is Zip19. I have basically just been making a case of against them incase they try to proceed with any further action, but considering they are illegal and I have filed complaints with every agency needed I am not too worried. Wow such a relief. Thank you to all and I am looking forward to helping everyone else find peace of mind!!

Thank you!!


Submitted by JenT on Wed, 03/23/2011 - 16:39

JenT

( Posts: | Credits: )


Here's a list showing which states are legal and which states are illegal for payday loans.

[URL="http://en.wikipedia.org/wiki/Payday_loans_in_the_United_States"]http://en.wikipedia.org/wiki/Payday_..._United_States[/URL]

I'm in New York and it is illegal here in New York. I currently have 9 payday loans and my back is just about broken. I'm borrowing from Peter to pay Paul so to speak. Is there any legal recourse the PDL's can take once I freeze/close my bank account?
I know they are going to be calling my job and harrasing the secretaries (because I gave them the real phone number to get the loans in the first place). So what do I do? I'm not paying these rats back because they already received more than the loan back in the interest they have been charging me every 2 weeks. I just don't want to get fired because of harrasing phone calls.
Any info on the following PDL companies....which are legit, which are illegal? Nationwide Cash, Loan Point USA, Advance Me Today, Loan Shop Online, Spot On Loans, Alpine Direct, Zip19, Extrafunds, Huskhawk Group. What form letter do I need?


Submitted by bay ridge on Wed, 03/23/2011 - 17:01

bay ridge

( Posts: 14 | Credits: )


Can anyone help with the following: I had a payday loan with extrafunds.com for $500 a while back. It rolled over several times and in the end, I paid them a total of $1,100. But I paid them back in full. I recently took another loan with extrafunds.com for another $500. This was a second loan I had with them. I can't pay them back because I have 8 other PDL's currently! Should I pay them back the principle ($500) for this second loan? Or does the $1,100 I already paid them mean something....even though this second loan is different and separate from the first?


Submitted by bay ridge on Fri, 03/25/2011 - 21:15

bay ridge

( Posts: 14 | Credits: )


I live In MA and have two PDL's, one from PaydayMaxx and the other Zip19. I've been dealing with these guys for the past year, have paid over $6K in fees and I'm wondering if anyone has received money back from these companies after filing letters. Please reach out and tell me your story!


Submitted by on Sat, 03/26/2011 - 16:43

( Posts: 202330 | Credits: )


Oh my God! This really works! I sent the email I copied from this site to Magnum and just got a response saying that they will consider my loan paid in full after I pay the remaining principal balance of $350.00. Considering that I was unable to make my last payment and my remaining balance if I had stayed on their plan would have been $900.00, I consider myself lucky.

Thank you so much for the information. I live in Ohio and was wondering how I would ever pay this back and still keep up with everything else. You guys were a godsend. Now I am waiting for a reply from Zip19.

No more payday loans for me!

Sue


Submitted by on Fri, 04/29/2011 - 15:37

( Posts: 202330 | Credits: )


i need to know if kenwood services are pdl. i am from n.y. and i need to know, i closed my acct on friday, and it is wed. and they are calling me none stop, i am going to send the letter , but i need to make sure this is a payday loan, thank you ,


Submitted by postlinda1885 on Wed, 06/01/2011 - 08:56

postlinda1885

( Posts: 23 | Credits: )